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Updated on Thursday, March 5, 2020
Modera Wealth Management is an East Coast wealth management firm with about 70 employees across six offices. All of its investment advisors either have a certified financial planner (CFP) designation or are studying to obtain it. The firm provides customized portfolios and wealth management services to both individuals and high net worth individuals, though it states on its website that its services are designed for those who have at least $2 million to invest. The firm currently has nearly $2.4 billion in assets under management (AUM).
All information included in this profile is accurate as of March 5, 2020. For more information, please consult Modera Wealth Management’s website.
|Assets under management: $2,391,444,456|
|Minimum investment: None|
|Fee structure: Percentage of AUM for wealth management and portfolio management; hourly charges for financial planning and consulting; fixed fees for business and real estate coaching|
|Headquarters:||56 Jefferson Avenue
Westwood, NJ 07675
Overview of Modera Wealth Management
In 2011, registered investment firms Modera Capital and Back Bay Financial Group merged to form Modera Wealth Management. In the years since, the combined firm has merged with or acquired another five firms located throughout the country. The fast-growing independent firm is owned by a group of 17 principals, most of whom have had long careers in wealth management.
Modera Wealth Management has 69 employees across six offices in Massachusetts, New Jersey, North Carolina, Georgia and Florida. Of those employees, 39 serve as investment advisors, of which 33 are CFPs, a professional designation for financial planners. Those advisors who don’t have a CFP designation are working toward one.
What types of clients does Modera Wealth Management serve?
A little more than half of Moderal Wealth Management’s clients are high net worth individuals. However, the firm also has hundreds of individual clients who are not classified as high net worth individuals, which the SEC defines as those with at least $750,000 under management or a net worth of $1.5 million. Those individuals may include business owners; C-level executives; attorneys and accountants in partnerships; and physicians and dentists.
In addition to individual investors, Modera Wealth Management also provides services to pension plans, charitable organizations and businesses.
There is technically no minimum account size requirement at Modera. Due to its minimum fee requirements for its services, however, working with Modera may be more accessible to those with larger portfolios. Additionally, the firm states on its website that its services are designed for those with at least $2 million to invest.
Services offered by Modera Wealth Management
Modera Wealth Management splits its services into two broad categories: wealth management and portfolio management. Wealth management clients receive financial planning and consulting services, which can include business coaching or real estate services, along with discretionary- or non-discretionary asset management for all or a portion of their portfolio. For clients who have chosen discretionary management, the firm may make trades on their behalf without getting approval for individual transactions. Modera also conducts tax preparation for some wealth management clients.
Portfolio management clients receive discretionary or non-discretionary management of investment portfolios, but the service does not include financial planning. Portfolio management clients who want financial planning can pay for that separately.
The firm also provides investment consulting and monitoring services on outside accounts held with other institutions to some existing clients, as well as retirement plan consulting and management services.
Here is a full list of the services offered by Modera Wealth Management:
- Portfolio management
- Wealth management
- Financial planning and consulting services
- Business planning
- Investment planning
- Insurance planning
- Retirement planning
- Education planning
- Estate planning
- Tax planning
- Cash flow forecasting
- Divorce planning
- Charitable giving
- Wealth transfer strategies
- Real estate coaching
- Investment consulting and monitoring services
- Retirement plan consulting and management services
- Collaboration with clients’ lawyers, accountants, etc.
How Modera Wealth Management invests your money
Modera Wealth Management makes investment decisions based on Modern Portfolio Theory, which holds the following tenets:
- The markets do a fairly good job of pricing securities.
- Diversification is essential.
- Increased risk can create the potential for greater returns.
Modera works with each client to create a portfolio tailored to their financial situation that achieves the highest rate of return with the least amount of risk. It also focuses on minimizing taxes and keeping overall costs down.
The firm’s portfolios primarily include mutual funds, exchange-traded funds and bonds, though they may also include some allocation to a third-party independent managers or non-traditional assets, such as commodities or real estate. For accredited investors, the firm may also recommend private investments, such as equity, bonds or pooled investment vehicles.
Fees Modera Wealth Management charges for its services
Modera Wealth Management has the discretion to negotiate or waive fees. However, it typically charges between 0.15% to 1.00% of assets under management for wealth management services, with a minimum quarterly fee of $5,000. The typical fee for portfolio management services is 0.10% to 0.80% of assets under management, with a minimum quarterly fee of $4,000. Clients may also have to pay transaction costs, commissions or other fees to third-party financial institutions if their portfolio includes such investments.
Financial planning costs are included in wealth management services, but those who opt for portfolio management services will need to pay separately for financial planning. Typical financial planning fees range from $200 to $500 per hour, or $2,000 to $10,000 on a fixed fee basis. Modera usually imposes a minimum fee of $2,000 for all financial planning and consulting services, which can be assessed on a per project basis. If a client later engages the firm for wealth management, it may offset the cost of wealth management by the fees already paid.
Business and real estate coaching carry separate fees, ranging from $2,000 to $25,000 per quarter. Clients who use Modera Wealth Management for investment monitoring or consulting may pay additional fees of $7,000 to $50,000 per year, which may cover financial planning services as well.
Modera Wealth Management’s highlights
- Highly-credentialed staff: Most of Modera Wealth Management’s financial advisors are certified financial planners, meaning they’ve undergone rigorous training and testing and are held to a fiduciary standard. There are also advisors at the firm with a variety of other respected designations, including certified public accountants (CPA) and chartered financial analysts (CFA), as well as employees who have earned MBAs and JDs.
- Fee-only model: The firm does not earn commissions, instead only making money through the fees that its clients pay. This means that there is no conflict of interest when it recommends a product or refers clients to another service provider.
- Personalized attention: Modera creates customized portfolios for its clients that take into account their individual financial situation. Each client has a dedicated team working with them that includes a lead advisor, support advisor and client service advisor.
- Industry recognition and awards: The firm has appeared for each of the past five years on The Financial Times’ list of the Top 300 RIA Firms. Additionally, the firm has received multiple awards for its role as an employer, appearing on Pension & Investments’ 2019 list of the “Best Places to Work in Money Management” and Investment News’ 2019 list of the “Best Places to Work for Financial Advisors.”
- No disciplinary disclosures: Modera Wealth Management has a clean disciplinary record (see more below)
Modera Wealth Management’s downsides
- High fees for lower-balance investors: While the firm does not have a minimum investment balance, it states on its website that its services are meant for people with at least $2 million to invest. Clients with significantly less than that amount will pay much higher fees as a percentage of their assets under management, since the firm charges a minimum fee of $16,000 per year for portfolio management and $20,000 per year for wealth management.
- Limited geographic footprint: Modera Wealth Management has six offices along the East Coast, from Massachusetts to Florida. That makes it an impractical choice for those who live further west and prefer an advisor with whom they can meet in person. However, for those comfortable with a long-distance relationship, Modera is registered to work with investors in a total of 24 states.
- Preferred brokers: Modera Wealth Management has relationships with Schwab, TD Ameritrade, Fidelity and National Advisors Trust, and it may recommend that clients choose these brokerages as their custodian. While the firm does not receive financial compensation for sending clients to those brokerages, clients may be able to purchase some investments at lower prices from a different firm.
Modera Wealth Management disciplinary disclosures
If an SEC-registered firm or its employees face a disciplinary action, such as a criminal charge, regulatory infraction or civil lawsuit, the firm must report that incident on its Form ADV, paperwork that registered firms must file with the SEC. According to Modera Wealth Management’s Form ADV, it has faced no such incidents and has a clean disciplinary record.
Modera Wealth Management onboarding process
If you’re interested in working with Modera Wealth Management, you can fill out the online form provided on the firm’s website or call a local office. The process begins with a meeting in which you’ll discuss your financial situation and goals with your three-person team, including an advisor, a support advisor and a client service advisor. Your team will then use that information to come up with a portfolio and, if you’re a wealth management client, a financial plan.
Then, the advisors will work toward implementing your plan. The process may include conversations with other professionals in your life, such as your lawyer, accountant or insurance agent. Going forward, you’ll be in touch with your advisors as often as you’d like, though clients typically have formal discussions twice per year.
Is Modera Wealth Management right for you?
If you have at least $2 million to invest and live on the East Coast, Modera Wealth Management may be a good choice. You’ll get personalized services and conflict-free advice, thanks to the firm’s fee-only business model. While the firm does have many clients who are not high net worth investors, its services are designed for those with an account balance of at least $2 million and those with smaller portfolios may pay proportionally higher fees. For investors with less money to invest, other wealth management firms may offer similar services at a lower prices.